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Challenge:
Need to increase subcontractor bids? Not enough response = low coverage expectation. The preparation of a good invitation to bid or request for proposal is both the most important and possibly the most difficult step in the preconstruction process. Implementing the wrong invitation to bid format can mean your subcontractors will not read or even receive your ITB, resulting in lower than expected coverage and last minute call list distribution and panic. (Come on, we have all been there!) This can cause low volume and low quality of bids, and maybe even losing the project to a competing general contractor. So, what is the optimal invitation to bid format that produces higher subcontractor response rates?
Analysis:
Take a look at the current invitations to bid you're currently sending out to your subcontractors. Is the design/layout appealing or too excessive? Does it convey the project information you would like evaluated or is it too vague and have unambiguous wording? Also, pay attention to the timing of your contract bid awards. Are you providing your subcontractors sufficient time and information to prepare the bids or proposals?
Solution/General Tips:
Think of it like this: Your ITB is an advertisement for a product (project) your company is selling. The ONLY reason you are sending it out is that you need to know your potential coverage, right? You NEED to increase your subcontractor engagement.
Take heed from marketing. I challenge you to show them your ITB template. You know, the one that looks just like a fax sheet from the 90s. There are colors and font and even specific phrases to avoid, optimum times to send (that don't always make sense).
Your invitation to bid does not need to be a work of art. Having seen tens of thousands of invitations to bid in almost every format you could possibly imagine, I can assure you the plainest, simplest, cleanest, and most direct approach will get you the best results. Below are some tips on how to draft an organized, well-developed ITB to maximize your chances of obtaining quality subcontractor bids.
- Use a bid or project management solution using a reputable email (SMTP) provider.
- Remove excessive art, large colored text. This type of formatting will most likely send your ITB straight to the spam folder.
- Try split testing on a project and have two different invitations to bid. Perhaps one invitation to bid could incorporate everything you want, or think you need. The second should contain only what is needed, that is, the most direct, or concise information regarding the project. Having made this suggestion to general contractors in the past, they were surprised to see a double-digit percentage increase in subcontractor delivery and responses.
- Use precise terms and unambiguous wording. If the subcontractor must provide something, use the words “must” or “shall,” not the words “should” or “may.”
- Avoid vague phrases. For example, for a tenant improvement invite, your content should state items such as “tenant improvement in new space” or “build-out in vanilla shell” not “retail project.” However, try not to use overly technical language.
- Provide subs with sufficient time to prepare their proposals. Review timing in the past that has resulted in the top, qualified bids. For example, which day and/or time resulted in the highest ITB open rate, click rate and response rate.
